Fin622 Current Quiz

Question # 1 of 15 ( Start time: 11:20:12 AM ) Total Marks: 1
Which of the following statement best describe the term Market Correction?
Select correct option:

Market Correction refers to the situation where equilibrium of supply & demand of shares occurs in the market
Market correction occurs when shares’ intrinsic values becomes equal to face values
Market Correction occurs when there is a boom in the economy
Market Correction occurs when inflation rate is above the market interest rate


Question # 2 of 15 ( Start time: 11:21:25 AM ) Total Marks: 1
Which of the following illustrates the use of a hedging (maturity matching) approach to financing?
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Permanent working capital financed with long-term liabilities.
Short-term assets financed with equity.
All assets financed with 50 percent equity, 50 percent long-term debt mixture.
Short-term assets financed with long-term liabilities.


Question # 3 of 15 ( Start time: 11:22:31 AM ) Total Marks: 1
If two projects offer the same, positive NPV, then which of the following would be a reasonable conclusion?
Select correct option:

The projects would have the same IRR.
The projects would have the same payback period.
The projects are mutually exclusive.
The projects would add the same amount to the value of the firm.


Question # 4 of 15 ( Start time: 11:23:57 AM ) Total Marks: 1
If a creditor wanted to know if a potential customer paid its bills on time, the creditor could look at the potential customer's:
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Current ratio.
Acid ratio.
Average age of accounts payable.
Average age of accounts receivable


Question # 5 of 15 ( Start time: 11:25:18 AM ) Total Marks: 1
Which of the following is closely related to a sales budget?
Select correct option:

Miscellaneous income
Future profits
Cash outflow
Cash inflow


Question # 6 of 15 ( Start time: 11:26:43 AM ) Total Marks: 1
What is the future value of Rs.1 invested for 10 years if the 12 percent annual rate of interest is compounded quarterly?
Select correct option:

Rs.2.30
Rs.3.26
Rs.3.25
Rs.2.93


Question # 7 of 15 ( Start time: 11:28:05 AM ) Total Marks: 1
Which of the following methods would be most suitable for calculating the return on stocks of a non-listed company?
Select correct option:

Dividend Growth model
Capital Asset Pricing Model
Security Market Line
Characteristics line


Question # 8 of 15 ( Start time: 11:29:20 AM ) Total Marks: 1
Which of the following is tax deductible?
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Dividend on preferred shares
Dividend on common stocks
Coupon payments on bonds
Capital gain on common stocks


Question # 9 of 15 ( Start time: 11:30:30 AM ) Total Marks: 1
Suppose a stock is selling today for Rs.35 per share. At the end of the year, it pays a dividend of Rs.2.00 per share and sells for Rs.39.00. What is the dividend yield on the stock?
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2%
3%
4%
5%


Question # 10 of 15 ( Start time: 11:31:31 AM ) Total Marks: 1
Which of the following would lower a firm's operating break-even point?
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An increase in the cost of goods sold
An increase in selling price
An increase in wages paid to employees
An increase in total sales


Question # 11 of 15 ( Start time: 11:32:42 AM ) Total Marks: 1
If two projects are independent, that means that ___________.
Select correct option:

Selection of one precludes selection of the other.
You should analyze the projects independently.
Both the given options may apply
None of the given options


Question # 12 of 15 ( Start time: 11:33:54 AM ) Total Marks: 1
Which of the following is a method of evaluating securities by analyzing statistics generated by market activity, such as past prices and volume?
Select correct option:

Technical analysis
Fundamental analysis
Common size analysis
Ration analysis


Question # 13 of 15 ( Start time: 11:34:59 AM ) Total Marks: 1
The variance of an investment's returns is a measure of the:
Select correct option:

Volatility of the rates of return.
Probability of a negative return.
Historic return over long periods.
Average value of the investment.


Question # 14 of 15 ( Start time: 11:36:05 AM ) Total Marks: 1
Which of the following statement is CORRECT regarding residual dividend policy?
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Shareholders are paid dividend from capital
Dividend are paid after meeting all the financial needs of the firm
The management sets a fixed payout ratio
Shareholders are paid fixed dividend every year


Question # 15 of 15 ( Start time: 11:37:10 AM ) Total Marks: 1
Juan is starting a software writing company. He is the owner and has only 3 employees. He wants a simple inexpensive form of ownership that leaves him in control and that he can quickly dissolve if he decides to change to another business. His best choice of form of ownership would be:
Select correct option:

S-corporation.
Partnership.
Corporation
Sole proprietorship